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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 168.10 (trend line)
- Resistance: 170.21 (23.6% Fib exp.), 171.63 (38.2% Fib exp.)
The British Pound fell as expected against the Japanese Yen but prices may be readying to launch a recovery from support at a rising trend line set from April 2013. The pair is on pace to complete a bullish Piercing Line candlestick pattern, a setup hinting at forthcoming reversal. Near-term resistance is at 170.21, the 23.6% Fibonacci expansion, with a break above that targeting the 38.2% level at 171.63. Trend line support is now at 168.10.
Risk/reward considerations argue against entering long at this point with prices trading too close to relevant resistance. We will continue to stand aside for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com